AURORA | The City of Aurora will appeal an Adams County district court ruling that said the city held an invalid election to create a special tax district around the future Gaylord Rockies Hotel and Conference Center.
On Feb. 23, Judge Ted C. Tow III of Colorado’s 17th Judicial District said that Aurora violated the Taxpayer’s Bill of Rights, or TABOR, with an election process that did not include enough voters to approve a special tax district to finance the project.
The land the hotel is set to be built on near DIA was owned by a single entity, LNR CPI High Point LLC, in 2011 when the election was held to create the special tax district. The corporation was the only voter in that election.
The judge explained in his ruling, “Not one person who may ultimately pay the tax was permitted to vote on this tax increase. The only vote cast was on behalf of an entity that, at most, would be responsible for collecting the tax.”
Aurora responded Tuesday with an appeal.
“The Gaylord project is alive and well. I’m still confident the project will continue to move forward,” said Aurora City Attorney Mike Hyman about Tuesday’s ruling.
Aurora officials have long contended the hotel will be mostly used by tourists and travelers rather than by residents.
Tow countered in his ruling “it is simply not uncommon for local residents to take advantage of stays at local hotels, and eat at the restaurants in those hotels.” He said that voter approval, in order to be valid, needed an “appropriately drawn electorate consisting of those within the relevant municipality, county, or other TABOR district who will bear the primary burden of paying the tax.”
Dan Lynch, one of the lawyers hired by the city, countered the practice is fairly common, but could not provide specific examples of when a similar single-voter election was used in connection with a large development like this one.
“If you look at cities around the metro area, a large number would have general improvement districts. A number of those would include cases where a corporate property owner was allowed to vote through an individual. It’s not an unusual case,” he said.
He added that Tow’s ruling sets a dangerous precedent for general improvement districts being created in the state.
“If you were to apply the opinion literally, that would mean there is always some unknown group of people who someday have to pay the tax who ought to vote,” he said. “That’s what the Supreme Court has referred to as vote dilution, when you have uninterested people added to an electorate to outvote people that are interested. The voter that’s hurt by that is the voter in area where the tax is imposed.”
Hyman said the city won five of the six claims that were part of the lawsuit. The judge upheld Aurora designating the hotel land as an urban renewal district and the city being allowed under state law to create an enhanced taxing district in the area.
The Adams County lawsuit was filed against the city by two Aurora residents last year who claimed the project violates Colorado’s tax restriction laws. At issue is whether funding for the project — including $300 million in tax incentives from the city of Aurora — followed the law. Opponents of the plan say it skirted the state’s Taxpayers Bill of Rights, while supporters say it followed well-established rules for big projects that rely partly on tax incentives.
On Tuesday the Denver Business Journal reported Colorado Treasurer Walker Stapleton questioning the validity of state incentives awarded to the hotel project. According to the story, Stapleton wrote a letter to the executive director of the Colorado Office of Economic Development and International Trade Feb. 20 asking why the state awarded a subsidy to the project.
On Feb. 23, Aurora Mayor Steve Hogan responded with his own letter to Stapleton, calling the move”politically motivated” and “ill informed.”
Hogan said the issues raised in Stapleton’s letter were the same ones raised by a group of mostly Denver hotels who oppose the project. Last April, a Denver judge dismissed the hotels’ request for the state to revoke the tax rebate award because details of the project had changed.
“Why is the State Treasurer’s Office taking a stand against competition by siding with this small group of hoteliers?” Hogan asked in the letter.
I am an Aurora resident and in my view the Gaylord project NEEDS to move forward. I hear talk about Aurora being this and that, all negative! Aurora is a beautiful, diverse, with lots of potential of being something bigger. Competition, competition, competition! If my tax dollars are being used to incentivize a project on this scale in my city, then I am all for it. Tax dollars should be used to better out city not make it fall behind against the other competition. WAKE UP PEOPLE!
Odd that Aurora’s City Council or Aurora’s Mayor could not recommend one Aurora citizen to the land owner for the deciding vote for this tax increase.
Maybe Council could have Denver residents vote on all of Aurora’s “competitive projects.”
Too bad.
Looks like Judge Tow just told the whole council to “sit down, shut up, and take a Midol.” Naturally, the council is incensed because how dare someone tell them what they can do with other people’s money!
Good to see Stapleton getting in on it also. As Treasurer he’s been a pit bull in protecting taxpayer money. (Although pit bulls aren’t allowed in Aurora.)
Aurora needs to start from scratch and do it right. It’s not often that the citizens get a second chance once government decides to manipulate their taxes and property. Unblight the land, charge the equal taxes that all other businesses pay (lower them while you’re at it), and leave the RTA alone or file it again as morally and legally correct.
If the Gaylord project is so efficient and beneficial, let it stand on its own merits.